Indian shares ended higher on Tuesday, with the blue-chip Nifty index surpassing the 16000 level for the first time, as investors bet on a faster recovery in Asia’s third-largest economy following a devastating second Covid-19 wave.

The NSE Nifty 50 index ended up 1.55 per cent at 16130.75 and the benchmark S&P BSE Sensex rose 1.65 per cent to 53823.36.

“The (16,000) level is important. It will add to the confidence of investors, especially because in the last 2-3 weeks the trend was weak,” said Vinod Nair, head of research at Geojit Financial Services.

“Earnings is providing a lot of support to the market. The economy is able to sustain itself in the new norm. The market is betting the Covid impact next year is going to be much lower,” Nair said, adding that a slew of successful initial public offerings had also boosted retail investor confidence.

Indian e-commerce beauty company Nykaa plans to raise $500 million through its initial public offering, becoming the latest homegrown startup to pursue a listing on the domestic bourses

“After a strong FY21, earnings for FY22 have begun on a healthy note. The 1QFY22 earnings season has been in-line, benefitting from the lower base of 1QFY21... Nifty profits for the 31 companies that have posted their results so far have grown 70 per cent YoY...

“We estimate corporate earnings to continue to recover...The primary market too continues with flurry of activity with as many as four IPOs lined up this week and three more next week, said Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services.

Indian shares have more than doubled since hitting near four year-lows in March 2020 when the Covid-19 pandemic struck, as a market flush with liquidity saw strong foreign fund inflows and increased retail participation.

Indian equities have attracted a net $6.93 billion in foreign inflows this year as of July, despite outflows from other Asian stock markets, data from Refinitiv Eikon showed.

Domestic investors purchased a net $2.2 billion worth of equity mutual funds in the first half, compared with net selling of $5.34 billion in the second half of 2020, data from Refinitiv Lipper showed.HDFC Ltd and Titan Company were top gainers on the Nifty 50 index, adding 3.8 per and 3.9 per cent, respectively.

The fast-moving consumer goods sub-index rose 1.73 per cent and Nifty finance index gained 1.68 per cent.